Is there a future for private practice in U.S. health care?

Is there a future for private practices?: ©Andy Dean - stock.adobe.com

The landscape of health care delivery has undergone a seismic shift in the past decade, with a pronounced trend toward physician employment and hospital acquisitions of private practices. This transformation has been driven by a complex interplay of factors, including increasing regulatory burdens, the escalating cost of technology, and the evolving reimbursement landscape. As a result, many physicians today are questioning the viability of private practice.

A decade ago, the medical profession looked markedly different. Physicians enjoyed greater autonomy, had more control over their practices, and saw increasing compensation as they gained experience and success in their careers. The allure of stability, guaranteed income, and reduced administrative headaches has led a significant portion of physicians to opt for employment. This trend has accelerated as hospitals and health systems have aggressively pursued acquisitions, expanding their reach and market share.

Today, private practitioners face an escalating burden of compliance. The intricate web of regulations, from HIPAA to Stark Law, has grown exponentially, demanding substantial investments in time, personnel, and technology. The sheer cost of maintaining compliance, coupled with the risk of penalties for non-adherence, has eroded profitability for many practices.

The technological evolution in health care has created a double-edged sword. While EHRs have the potential to streamline operations and improve patient care, the initial investment and ongoing maintenance costs are substantial. The complexities of interoperability and data security further exacerbate these challenges.

The question remains: Can private practice survive and thrive in this new era?

The answer lies in adaptation and innovation. Physicians and their practices must evolve to address the challenges posed by a rapidly changing health care environment. The followingstrategies will ensure private practices thrive in the near and long-term future.

Concierge medicine and reducing reliance on insurance

Private practices must transition away from a fee-for-service model to value-based care while investing in ways to reduce their dependence on insurance reimbursements. There is an early but clear trend in recent years showing more practices are refusing to accept private insurance and recent problems with Medicare and Medicaid are only going to push practices further towards alternative payment models.

Concierge medicine represents a significant shift away from the traditional fee-for-service model heavily reliant on insurance reimbursements. By charging patients an annual membership fee, concierge practices gain a more stable revenue stream, reduced administrative burdens associated with insurance claims, and greater control over patient care.

This model also aligns with the growing desire among patients for personalized, accessible health care. As more patients become disillusioned with the complexities of insurance, concierge medicine offers an attractive alternative.

Beyond concierge medicine, private practices can explore several strategies to decrease their dependence on insurance payments:

• Direct-to-Employer Contracts: Building relationships with employers to offer health care services at a negotiated rate can provide a steady revenue stream. This approach can be particularly effective for larger practices with the capacity to serve a significant employee population.
• Bundled Payments: Offering bundled services for specific conditions or procedures can help to shift the risk from fee-for-service to a value-based model. By demonstrating improved outcomes and cost savings, practices can negotiate more favorable contracts with payers.
• Cash-Pay Options: Providing cash-pay options for certain services can attract patients who prefer to pay out-of-pocket. This can be especially effective for elective procedures or services not covered by insurance.
• Expanded Service Offerings: Diversifying services beyond traditional clinical care can generate additional revenue. Offerings such as wellness programs, chronic disease management, and cosmetic procedures can attract patients willing to pay directly for these services.

Leverage technology wisely

While EHRs and practice management software are essential, they represent just the tip of the technological iceberg for modern private practices. A growing number of practices are investing in technology that streamlines the back end of practice management and seeing a reduction in costs and time savings.

Technology that enables physicians to spend more time with their patients and less time working on the business will be just as important to the future practice as patient-centered apps.

The rapid adoption of telehealth will require private practices to invest heavily in their digital infrastructure. To establish a secure and reliable telehealth infrastructure, private practices should prioritize robust internet connectivity, high-definition video conferencing platforms, and secure patient data management systems. Investing in user-friendly patient portals, electronic health records with telehealth integration, and robust cybersecurity measures is essential.

Practices should also consider patient devices and internet access, offering support for various platforms. Exploring remote patient monitoring technologies can enhance care delivery.

Build strategic partnerships for advocacy and coalition building

Private practices can bolster their resilience by forging strategic partnerships beyond the traditional health care ecosystem. Collaborating with local businesses, such as pharmacies, fitness centers, and nutritionists, can create a comprehensive wellness network.

These partnerships can offer cross-referrals, joint marketing campaigns, and shared resources. Engaging with chambers of commerce and local economic development organizations can provide valuable insights into community health needs and potential partnerships. Physicians should actively participate in local government and health care policy discussions. By building relationships with elected officials and policymakers, they can influence legislation that supports independent practices, such as fair reimbursement rates and reduced regulatory burdens.

To counter the influence of large health care systems, private practice owners must unite. Local and regional physician associations can amplify the collective voice and increase bargaining power with insurers. Participating in professional organizations with advocacy initiatives can provide additional support and resources. Physicians should also consider engaging with patient advocacy groups to build public support for policies that protect patient choice and access to care.

Conclusion

The future of private practice is undeniably challenging, yet filled with opportunities for those willing to adapt. It is imperative for physicians to recognize the power of collective action and to engage in advocacy efforts to shape a healthcare landscape that supports independent practice. Ultimately, the success of private practice hinges on the ability to deliver exceptional patient care while navigating the complexities of the health care industry.

Sarah M. Worthy is the CEO of DoorSpace.